IndiGo has raised the fuel charge it adds to fares for bookings made from October 6. On domestic routes the charge now runs from Rs 375 for flights up to 500 km (was Rs 275) to Rs 1,300 above 2,000 km (was Rs 950); international charges range from Rs 1,000 on short SAARC routes to Rs 10,000 for Europe. The airline cited the Rs 16 a litre increase in domestic jet fuel on October 1, which took the price to Rs 137 from Rs 121, and said fuel costs are among the highest of the past decade.
Why it matters for listed companies
Jet fuel is roughly 40% of an Indian airline's operating cost, so a 13.2% rise in one month cannot be absorbed without either higher fares or lower margins. IndiGo is choosing fares; the test is whether demand holds as tickets get dearer going into the festive travel season. The airline already reported a consolidated net loss of Rs 237.60 crore for April-June against a profit of Rs 2,176.30 crore a year earlier, on revenue of Rs 24,584.10 crore. As the market leader, its surcharge sets the reference for other carriers, and travel agents and hotel chains feel any drop in leisure traffic.
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